CoStar Fourth Quarter Revenue Climbs 51% Year-Over-Year Reaching $100 Million and Drives 86% Year-Over-Year EBITDA Increase

CoStar Fourth Quarter Revenue Climbs 51% Year-Over-Year Reaching $100 Million
and Drives 86% Year-Over-Year EBITDA Increase

WASHINGTON, Feb. 27, 2013 (GLOBE NEWSWIRE) -- CoStar Group, Inc.
(Nasdaq:CSGP), commercial real estate's leading internet provider of
information, analytics and marketing services, announced today that revenue
for the fourth quarter of 2012 was $100.1 million versus $66.2 million in the
fourth quarter of 2011, which represents an increase of 51% year-over-year.
Revenue for the year ended December 31, 2012 was $349.9 million, an increase
of 39% over revenue of $251.7 million for the full year of 2011.

Year 2011-2012 Quarterly Results - Unaudited
(in millions, except per share data)
                    2011                         2012
                    Q1     Q2     Q3     Q4      Q1     Q2     Q3     Q4
                                                               
Revenues             $ 59.6 $ 62.1 $ 63.8 $ 66.2 $ 68.6 $ 85.2 $ 96.0 $ 100.1
EBITDA               10.5   7.1    6.0    11.0    11.9   8.2    19.6   20.5
Net income (loss)    4.5    2.6    2.3    5.2    5.1    (6.7)  6.8    4.7
Net income (loss)    0.22   0.12   0.09   0.20    0.20   (0.25) 0.24   0.17
per share - diluted
Weighted average
outstanding shares - 21.0   22.4   25.3   25.4    25.5   26.5   27.7   27.7
diluted
                                                               
Adjusted EBITDA      12.6   14.3   14.0   16.0   15.3   20.4   25.6   25.1
Non-GAAP Net Income  6.2    7.3    7.2    8.4     8.2    10.5   13.1   12.6
Non-GAAP Net Income  0.29   0.33   0.28   0.33    0.32   0.39   0.47   0.46
per share - diluted

"2012 was an exceptional year for CoStar both financially and strategically,"
said Andrew C. Florance, Founder and Chief Executive Officer of CoStar."We
closed the LoopNet acquisition, and I am very pleased with the early successes
we are achieving as we continue integrating the two companies.In the 10
months since we closed the acquisition of LoopNet, we have achieved cost
synergies of approximately $18 million.We are successfully upselling LoopNet
information users to CoStar information services. CoStar has now sold
approximately $10 million of annual contract value in information services to
LoopNet members who previously only had a $160,000 commitment. Similarly, we
have sold $1.7 million of LoopNet marketing services to CoStar clients."

Florance stated: "We increased the organic revenue growth rate of LoopNet
Premium Membership sales 140%, taking it from 5% in the fourth quarter of 2011
to 12% in the fourth quarter of 2012. From the third quarter to the fourth
quarter of 2012, we also increased the average new sales price for LoopNet
Premium Membership from $56 to $69 and reduced the cancellation rate from 6.1%
to 5.6%. The fourth quarter 2012 cancellation rate for LoopNet Premium
Membership is the lowest it has been since the third quarter of 2007."

"We expect the LoopNet cross-selling opportunity to continue to drive highly
profitable double digit revenue growth for the foreseeable future. We believe
that as we grow past the $100 million revenue quarter milestone we are well
positioned to achieve our goal of exiting the fourth quarter of 2014 at an
annual revenue run rate of $500 million with 30-35% margins," said Florance.

With the acquisition of LoopNet, CoStar Group now operates websites that have
over 10 million unique monthly visitors in aggregate.

EBITDA (defined below) in the fourth quarter of 2012 was $20.5 million versus
$11.0 million in the fourth quarter of 2011, which is an increase of 86%
year-over-year. EBITDA for the year ended December 31, 2012 was $60.2 million
which is an increase of 74% over EBITDA of $34.6 million for the full year of
2011.Adjusted EBITDA (defined below) was $25.1 million for the fourth quarter
of 2012, which is an increase of 57% year-over-year. Adjusted EBITDA for the
year ended December 31, 2012 was $86.4 million, up $29.5 million or 52% from
$56.9 million for the full year of 2011.

Non-GAAP net income (defined below) in the fourth quarter of 2012 was $12.6
million or $0.46 per diluted share, which represents an increase of $4.2
million or 50% year-over-year. Non-GAAP net income for the year ended December
31, 2012 was $44.4 million or $1.65 per diluted share, which represents an
increase of 53% over non-GAAP net income of $29.1 million for the full year of
2011. Net income in the fourth quarter of 2012 was $4.7 million or $0.17 per
diluted share and $9.9 million or $0.37 per diluted share for the year ended
December 31, 2012.

In the fourth quarter of 2012, the Company's 12-month trailing renewal rate
for annual subscription-based services was 94%, and the renewal rate for
CoStar's over 5,000 customer firms that have been subscribers for five years
or longer was 99%. Both rates remain at all-time highs.

As of December 31, 2012, the Company had approximately $177.7 million in cash,
cash equivalents, short-term and long-term investments.This represents an
increase of $25.9 million from the third quarter of 2012.Short and long-term
debt associated with the LoopNet acquisition totaled approximately $170.6
million as of December 31, 2012.

2013 Outlook

"Based on the positive results of our cross-selling and integration
initiatives, as well as the continued strength of our core information sales,
we expect strong revenue and earnings growth in 2013," stated CoStar Group
Chief Financial Officer Brian J. Radecki.For the first quarter of 2013, the
Company expects revenue of approximately $101 million to $103 million, and
approximately $424 million to $429 million for the full year 2013. The annual
revenue outlook includes a reduction of approximately $5 million to $7 million
from de-emphasizing or eliminating certain redundant services, but in the long
term the Company expects to replace and even exceed these revenues by
converting users of these services to higher quality services offered under
annual subscriptions.

For the first quarter of 2013, the Company expects non-GAAP net income per
diluted share (defined below) of approximately $0.41 to $0.45. First quarter
2013 expenses include seasonally higher costs related to our annual sales
conference, increased marketing expenses to support the LoopNet cross-selling
initiative and standard annual increases in personnel expenses. For the full
year of 2013, the Company expects non-GAAP net income per diluted share in a
range of approximately $2.08 to $2.20. The annual outlook includes a reduction
of approximately $0.08 to $0.12 of non-GAAP net income per diluted share
related to eliminating or de-emphasizing certain services as noted above.

Also, the company may begin to incur additional stock-based compensation
expenses in 2013 or 2014 mainly related to restricted stock granted in early
2012 that vests upon achievement of performance criteria. The company expects
to begin recording the expense for the grants when management determines it is
probable the goal will be achieved. The company expects to record a cumulative
catch-up of stock-based compensation expense of approximately $10 million to
$15 million in the initial quarter that it is deemed probable that the
profitability goals will be achieved, and approximately $2 million to $3
million per quarter thereafter for a total incremental expense of
approximately $24 million. The adjusted EBITDA and non-GAAP earnings per
diluted share in the Company's outlook do not include stock compensation
expense and other items.

The preceding forward-looking statements reflect CoStar's expectations as of
February 27, 2013, including forward-looking non-GAAP financial measures on a
consolidated basis – including LoopNet and related costs. We are not able to
forecast with certainty whether or when certain events, such as
acquisition-related costs, restructuring, settlements or impairments will
occur in any given quarter. Given the risk factors, uncertainties and
assumptions discussed above, actual results may differ materially. Other than
in publicly available statements, the Company does not intend to update its
forward-looking statements until its next quarterly results announcement.

Reconciliation of non-GAAP net income, EBITDA, adjusted EBITDA and all of the
disclosed non-GAAP financial measures to their GAAP basis results are shown in
detail below, along with definitions for those terms.

Non-GAAP Financial Measures

For information regarding the purpose for which management uses the non-GAAP
financial measures disclosed in this release and why management believes they
provide useful information to investors regarding the Company's financial
condition and results of operations, please refer to the Company's latest
periodic report.

EBITDA is a non-GAAP financial measure that represents GAAP net income
attributable to CoStar Group, Inc. before (i) interest income (expense), (ii)
provision for income taxes, and (iii) depreciation and amortization.

Adjusted EBITDA is a non-GAAP financial measure that represents EBITDA before
(i) stock-based compensation expense, (ii) acquisition and integration related
costs, (iii) restructuring charges and related costs, (iv) costs related to
the acquisition and transition of the Company's corporate headquarters, and
(v) settlements and impairments incurred outside the Company's normal business
operations.

Non-GAAP net income is a non-GAAP financial measure that represents GAAP net
income attributable to CoStar Group, Inc. before (i) purchase amortization and
other related costs, (ii) stock-based compensation expense, (iii) acquisition
and integration related costs, (iv) purchase accounting adjustments, (v)
restructuring charges and related costs, (vi) costs related to the acquisition
and transition of the Company's corporate headquarters, and (vii) settlements
and impairments. From this figure, we then subtract an assumed provision for
income taxes to arrive at non-GAAP net income. In 2011, we assumed a 40% tax
rate, and in 2012 and beyond we assume a 38% tax rate in order to approximate
our long-term effective corporate tax rate.

Non-GAAP net income per diluted share (also referred to as non-GAAP EPS) is a
non-GAAP financial measure that represents non-GAAP net income divided by the
number of diluted shares outstanding for the period used in the calculation of
GAAP net income per diluted share.

Earnings Conference Call

Management will conduct a conference call to discuss earnings results for the
fourth quarter of 2012 and the Company's outlook for 2013 at 11:00 a.m. EST on
Thursday, February 28, 2013. The audio portion of the conference call will be
broadcast live over the Internet at http://www.costar.com/investors.aspx. To
join the conference call by telephone, please dial (800) 230-1096 (from the
United States and Canada) or (612) 332-0107 (from all other countries) and
refer to conference code 279285. An audio recording of the conference call
will be available approximately one hour after the live call concludes and
remain available for a period of time following the call. To access the
recorded call, please dial (800) 475-6701 (from the U.S. and Canada) or (320)
365-3844 (from all other countries) using access code 279285. The webcast
replay will also be available in the Investors section of CoStar's web site
for a period of time following the call.

CoStar Group, Inc.
Condensed Consolidated Statements of Operations-Unaudited
(in thousands, except per share data)
                                                                
                                   For the Three Months For the Twelve Months
                                   Ended December 31,   Ended December 31,
                                   2012       2011      2012       2011
                                                                
                                                                
Revenues                            $100,083 $66,164 $349,936 $ 251,738
Cost of revenues                    31,478     22,014    114,866    88,167
Gross margin                        68,605     44,150    235,070    163,571
                                                                
Operating expenses:                                              
Selling and marketing               26,537     16,171    84,113     61,164
Software development                10,042     4,617     32,756     20,037
General and administrative          17,552     14,987    77,154     58,362
Purchase amortization               4,569      613       13,607     2,237
                                   58,700     36,388    207,630    141,800
                                                                
Income from operations              9,905      7,762     27,440     21,771
Interest and other income           86         224       526        798
Interest and other expense          (1,810)    0         (4,832)    0
Income before income taxes          8,181      7,986     23,134     22,569
Income tax expense, net             3,467      2,810     13,219     7,913
Net income                          $4,714   $5,176  $9,915   $14,656
                                                                
Net income per share - basic        $0.17    $0.21   $0.37    $0.63
Net income per share - diluted      $0.17    $0.20   $0.37    $0.62
                                                                
Weighted average outstanding shares 27,295     25,010    26,533     23,131
- basic
Weighted average outstanding shares 27,724     25,402    26,949     23,527
- diluted




CoStar Group, Inc.
Reconciliation of Non-GAAP Financial Measures-Unaudited
(in thousands, except per share data)
                                                               
                                                               
Reconciliation of Net Income                                    
to Non-GAAP Net Income
                                                               
                              For the Three Months    For the Twelve Months
                              Ended December 31,      Ended December 31,
                              2012         2011       2012        2011
                                                               
Net income                     $4,714     $5,176   $9,915    $14,656
Income tax expense, net        3,467        2,810      13,219      7,913
Income before income taxes     8,181       7,986     23,134     22,569
Purchase amortization and      7,596       1,012     22,241     3,590
other related costs
Stock-based compensation       3,615       1,993     12,282     8,103
expense
Acquisition and integration    1,007       3,063     13,924     14,191
related costs
Restructuring and related      --          --        --         1,509
costs
Settlements and impairments    --          --        --         (1,479)
Non-GAAP income before income  20,399      14,054    71,581     48,483
taxes
Assumed rate for income tax    38%          40%        38%         40%
expense, net *
Assumed provision for income   (7,752)     (5,621)   (27,201)   (19,393)
tax expense, net
Non-GAAP net income            $12,647    $8,433   $44,380   $29,090
                                                               
Net income per share - diluted $0.17      $0.20    $0.37     $0.62
Non-GAAP net income per share  $0.46      $0.33    $1.65     $1.24
- diluted
                                                               
Weighted average               27,724      25,402    26,949     23,527
outstandingshares - diluted
                                                               
* A 38% tax rate is assumed in 2012 in order to approximate the Company's
long-term effective corporate tax rate.A 40% tax rate was assumed in 2011.
                                                               
                                                               
Reconciliation of Net Income                                    
to EBITDA and Adjusted EBITDA
                                                               
                              For the Three Months    For the Twelve Months
                              Ended December 31,      Ended December 31,
                              2012         2011       2012        2011
                                                               
Net income                     $4,714     $5,176   $9,915    $14,656
Purchase amortization in cost  3,027        399        8,634       1,353
of revenues
Purchase amortization in       4,569        613        13,607      2,237
operating expenses
Depreciation and other         2,957        2,197      10,511      9,262
amortization
Interest income                (86)         (224)      (526)       (798)
Interest expense               1,810        0          4,832       0
Income tax expense, net        3,467        2,810      13,219      7,913
EBITDA                         $20,458    $10,971  $60,192   $34,623
Stock-based compensation       3,615        1,993      12,282      8,103
expense
Acquisition and integration    1,007       3,063     13,924     14,191
related costs
Restructuring and related      --          --        --         1,509
costs
Settlements and impairments    --          --        --         (1,479)
Adjusted EBITDA                $25,080    $16,027  $86,398   $56,947




CoStar Group, Inc.
Condensed Consolidated Balance Sheets - Unaudited
(in thousands)
                                                      
                                          December 31, December 31,
                                          2012         2011
                                          (Unaudited)  
ASSETS                                                 
Current assets:                                        
Cash and cash equivalents                  $156,027   $545,280
Short-term investments                     37           3,515
Accounts receivable, net                   16,392       16,589
Deferred income taxes, net                 9,256        11,227
Income tax receivable                      5,357        850
Prepaid and other current assets           9,560        5,722
Debt issuance costs, net                   2,934        --
Total current assets                       199,563      583,183
                                                      
Long-term investments                      21,662       24,584
Deferred income taxes, net                 --         10,224
Property and equipment, net                46,308       37,571
Goodwill                                   718,078      91,784
Intangible and other assets, net           170,632      20,530
Deposits and other assets                  2,274        2,241
Debt issuance costs, net                   6,622        918
Total assets                               $1,165,139 $771,035
                                                      
LIABILITIES AND STOCKHOLDERS' EQUITY                   
Current liabilities:                                   
Accounts payable and accrued expenses      $51,590    $38,533
Current portion of long-term debt          17,500      --
Income taxes payable                       --         978
Deferred revenue                           32,548       22,271
Total current liabilities                  101,638      61,782
                                                      
Long-term debt, less current portion       153,125      --
Deferred gain on sale of building          28,809      31,333
Deferred rent                              17,305      16,592
Deferred income taxes, net                 34,071      --
Income taxes payable                       2,818        2,151
Other long-term liabilities                1,030       --
                                                      
Stockholders' equity                       826,343      659,177
Total liabilities and stockholders' equity $1,165,139 $771,035




CoStar Group, Inc.
Results of Segments-Unaudited
(in thousands)
                                                             
                       For the Three Months       For the Twelve Months
                       Ended December 31,         Ended December 31,
                       2012          2011         2012          2011
Revenues                                                      
United States           $95,199     $61,613    $ 330,805    $ 233,381
International                                                 
External customers      4,884        4,551       19,131       18,357
Intersegment revenue *  360          335         1,514        1,140
Total international     5,244        4,886       20,645       19,497
revenue
Intersegment            (360)        (335)       (1,514)      (1,140)
eliminations
Total revenues          $ 100,083    $66,164    $ 349,936    $ 251,738
                                                             
EBITDA                                                        
United States           $23,897     $11,648    $70,199     $38,099
International **        (3,439)      (677)       (10,007)     (3,476)
Total EBITDA            $20,458     $10,971    $60,192     $34,623
                                                             
* Intersegment revenue is attributable to services performed by Property and
Portfolio Research Ltd., awhollyowned subsidiary of Property and Portfolio
Research, Inc. (PPR), for PPR.Intersegment revenue is recorded at what the
Company believes approximates fair value.U.S. EBITDA includes a corresponding
cost for the services performed by Property and Portfolio Research Ltd. for
PPR.
                                                             
** International EBITDA includes a corporate allocation of approximately
$800,000 and $600,000 for the three months ended December 31, 2012 and 2011,
and approximately $5,300,000 and $800,000 for the twelve months ended December
31, 2012 and 2011, respectively.




Reconciliation of Non-GAAP Financial Measures with 2011-2012 Quarterly Results -
Unaudited
(in millions, except per share data)
                                                                   
Reconciliation of
Net Income (Loss)                                                   
to Non-GAAP Net
Income
                                                                   
                  2011                            2012                    
                  Q1      Q2      Q3      Q4      Q1     Q2       Q3      Q4
                                                                   
Net income (loss)  $4.5  $2.6  $2.3  $5.2  $5.1 $(6.7) $6.8  $4.7
Income tax         2.8    1.5    0.9    2.8    3.7   5.6     0.4    3.5
expense, net
Income (loss)
before income      7.3    4.1    3.2    8.0    8.8   (1.1)   7.2    8.2
taxes
Purchase
amortization and   0.8    0.8    0.9    1.1    1.0   5.8     7.9    7.6
other related
costs
Stock-based
compensation       2.1    2.2    1.9    1.9    2.2   2.7     3.7    3.6
expense
Acquisition and
integration        0.3    5.0    5.8    3.1    1.2   9.5     2.3    1.0
related costs
Restructuring and  --    --    1.5    --    --   --     --    --
related costs
Settlements and    (0.3)  --    (1.2)  --    --   --     --    --
impairments
Non-GAAP income
before income      10.2   12.1   12.1   14.1   13.2  16.9    21.1   20.4
taxes
Assumed rate for
income tax         40%     40%     40%     40%     38%    38%      38%     38%
expense, net *
Assumed provision
for income tax     (4.0)  (4.8)  (4.9)  (5.7)  (5.0) (6.4)   (8.0)  (7.8)
expense, net
Non-GAAP net       $6.2  $7.3  $7.2  $8.4  $8.2 $10.5  $13.1 $12.6
income
                                                                   
Non-GAAP net
income per share - $0.29 $0.33 $0.28 $0.33 $0.32 $0.39  $0.47 $0.46
diluted
                                                                   
Weighted average
outstandingshares 21.0   22.4   25.3   25.4   25.5  26.9    27.7   27.7
- diluted
                                                                   
* A 38% tax rate is assumed in 2012 in order to approximate the Company's
long-term effective corporate tax rate.A 40% tax rate was assumed in 2011.
                                                                   
                                                                   
Reconciliation of
Net Income (Loss)                                                   
to EBITDA and
Adjusted EBITDA
                                                                   
                  2011                            2012                    
                  Q1      Q2      Q3      Q4      Q1     Q2       Q3      Q4
                                                                   
Net income (loss)  $4.5  $2.6  $2.3  $5.2  $5.1 $(6.7) $6.8  $4.7
Purchase           0.8    0.8    0.9    1.0    1.0   5.8     7.9    7.6
amortization
Depreciation and   2.6    2.4    2.1    2.2    2.3   2.4     2.8    3.0
other amortization
Interest income    (0.2)  (0.2)  (0.2)  (0.2)  (0.2) (0.1)   (0.1)  (0.1)
Interest expense   --    --    --    --    --   1.2     1.8    1.8
Income tax         2.8    1.5    0.9    2.8    3.7   5.6     0.4    3.5
expense, net
EBITDA             $10.5 $7.1  $6.0  $11.0 $11.9 $8.2   $19.6 $20.5
Stock-based
compensation       2.1    2.2    1.9    1.9    2.2   2.7     3.7    3.6
expense
Acquisition and
integration        0.3    5.0    5.8    3.1    1.2   9.5     2.3    1.0
related costs
Restructuring and  --    --    1.5    --    --   --     --    --
related costs
Settlements and    (0.3)  --    (1.2)  --    --   --     --    --
impairments
Adjusted EBITDA    $12.6 $14.3 $14.0 $16.0 $15.3 $20.4  $25.6 $25.1

                                                              
                                                              
                                                              
Reconciliation of
Forward-Looking Guidance, Net                                  
Income to Non-GAAP Net Income
(in thousands, except per                                     
share data)
                            Guidance Range         Guidance Range
                            For the Three Months   For the Twelve Months
                            Ended March 31, 2013   Ended December 31, 2013
                            Low         High       Low          High
                                                             
Net income                   $3,100    $4,900   $23,000    $27,900
Income tax expense, net      2,300       3,500      16,700       20,300
Income before income         5,400      8,400     39,700      48,200
taxes
Purchase amortization and    7,200      7,200     27,000      27,000
other related costs
Stock-based compensation     5,000      4,000     21,000      19,000
expense *
Acquisition and              400        300       500         400
integration related costs
Restructuring and related    400        300       5,000       4,000
costs
Non-GAAP Income before       18,400     20,200    93,200      98,600
income taxes
Assumed rate for income      38%         38%        38%          38%
tax expense, net **
Assumed provision for        (6,992)    (7,676)   (35,416)    (37,468)
income tax expense, net
Non-GAAP Net Income          $11,408   $12,524  $57,784    $61,132
                                                             
Net Income per share -       $0.11     $0.18    $0.83      $1.00
diluted
Non-GAAP Net Income per      $0.41     $0.45    $2.08      $2.20
share - diluted
                                                             
Weighted average
outstandingshares -         27,800     27,800    27,800      27,800
diluted
                                                             
* The forward looking guidance above does not include stock-based compensation
expense related to performance-based stock granted in 2012. The company
expects to begin recording the related stock-based compensation expense when
management believes it is probable that the profitability goals associated
with the stock will be achieved. In the initial quarter of the determination,
the cumulative catch-up of stock-based compensation expense is expected to be
in a range of $10 million to $15 million and additional expense of
approximately $2 million to $3 million per quarter thereafter for a total
incremental expense of approximately $24 million.
** A 38% tax rate is assumed for 2013 in order to approximate the Company's
long-term effective corporate tax rate.

About CoStar Group, Inc.

CoStar Group (Nasdaq:CSGP) is commercial real estate's leading provider of
information, analytics and marketing services. Founded in 1987, CoStar
conducts expansive, ongoing research to produce and maintain the largest and
most comprehensive database of commercial real estate information. Our suite
of online services enables clients to analyze, interpret and gain unmatched
insight on commercial property values, market conditions and current
availabilities. Through LoopNet, the Company operates the most heavily
trafficked commercial real estate marketplace online with more than 6.7
million registered members. CoStar operates websites that have over 10 million
unique monthly visitors in aggregate. Headquartered in Washington, DC, CoStar
maintains offices throughout the U.S. and in Europe including the industry's
largest professional research organization. For more information, visit
www.costar.com.

This news release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements include,
but are not limited to, statements about CoStar's financial expectations, the
company's plans, objectives, expectations and intentions and other statements
including words such as "hope," "anticipate," "may," "believe," "expect,"
"intend," "will," "should," "plan," "estimate," "predict," "continue" and
"potential" or the negative of these terms or other comparable terminology.
Such statements are based upon the current beliefs and expectations of
management of CoStar and are subject to significant risks and uncertainties.
Actual results may differ materially from the results anticipated in the
forward-looking statements. The following factors, among others, could cause
or contribute to such differences: the risk that the trends stated or implied
by this release cannot be sustained at the current pace, including trends
related to sales, earnings, and revenue growth and renewal rates; the risk
that the combination of CoStar and LoopNet does not result in or create the
anticipated benefits for CoStar; the risk that the LoopNet cross-selling
opportunity does not continue to result in highly profitable double digit
revenue growth; the risk that CoStar is unable to achieve its goal of exiting
the fourth quarter of 2014 at an annual revenue run rate of $500 million with
30-35% margins; the possibility that the company is unable to achieve strong
revenue and earnings growth in 2013; the risk that revenues for the first
quarter of 2013 and full year 2013 will not be as stated in this press
release; the risk that the company is unable to replace or exceed revenues
from eliminated or de-emphasized services; the risk that non-GAAP net income
per diluted share for the first quarter of 2013 and full year 2013 will not be
as stated in this press release; the risk that the timing of any additional
stock-based compensation expense to be recorded in connection with the
performance-based restricted stock grants issued in 2012 will not be as stated
in this release; the risk that the amount of the stock-based compensation
expense actually incurred and recorded will not be as stated in this press
release; the risk that the integration of LoopNet will not continue to result
in anticipated cost savings or synergies; and the risk that the businesses of
LoopNet and CoStar may not be combined successfully or in a timely and
cost-efficient manner.Additional factors that could cause results to differ
materially from those anticipated in the forward-looking statements can be
found in CoStar's Annual Report on Form 10-K for the year ended December31,
2011, and CoStar's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2012, each filed with the SEC, including in the "Risk Factors"
section of each of these filings, and the company's other filings with the SEC
available at the SEC's website (www.sec.gov).CoStar assumes no obligation to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.

CONTACT: Brian J. Radecki
         Chief Financial Officer
         (202) 336-6920
         bradecki@costar.com
        
         Richard Simonelli
         Director Investor Relations
         (202) 346-6394
         rsimonelli@costar.com